Mobile phone use to get costlier as budget proposes supplementary duty on voice, data services

Mobile phone use to get costlier as budget proposes supplementary duty on voice, data services

Finance Minister AMA Muhith has proposed a 5 percent supplementary duty on mobile phone services on SIM or RIM cards, which will raise costs of voice call and data transfer.

In his budget proposal for 2015-16 FY, Muhith proposed
to cut the tax for new mobile phone subscriptions from Tk 300 to Tk 100.

But the SIM replacement tax of Tk 100 remains
unchanged.

The National Board of Revenue (NBR) and the mobile
phone operators have long been at loggerheads over the SIM replacement tax.

The tax rate has been proposed to ensure “continued
development of the mobile sector and making the IT service easily attainable
through mobile phones and thus ensuring sustainable/equitable growth for this
sector”, Muhith said on Thursday.

He also proposed to increase the supplementary duty on
SIM cards to 20 percent from 15 percent.

According to BTRC, Bangladesh had more than 120
million mobile phone users until April this year. Of them, nearly 45 million
access internet through mobile phones.

Mobile-phone operators welcomed the proposal to reduce
the tax on new mobile phone subscriptions, but said the 5 percent supplementary
duty on services would hinder the growth of the sector.

Top officials of several operators told bdnews24.com
if this proposal was made effective, it will jack up costs when subscribers
spend Tk 100 for voice call and data transfer.

The Association of Mobile Telecom Operators of
Bangladesh (AMTOB) Secretary General TIM Nurul Kabir could not be reached for
comment.

But an official of one of the operators, asking not to
be named, told bdnews24.com that subscribers would have to spend Tk 21 more in
Tk 100 usage if 1 percent surcharge was added.

This would lower the rate of voice calls by the users
and lead to a drop in the income of the operators, the official sad.

Subscribers pay 15 percent VAT at present.

The Cabinet on Mar 30 cleared a new law allowing 1
percent surcharge on mobile phone usage.

If Parliament passes it, the one percent surcharge
would be imposed on the amount currently charged on users by operators for
their services.

In its reaction to the budget proposals, Robi said
reducing the tax on SIM cards was a major step, but it had expected total
exemption.

Robi expressed concern over the proposed supplementary
duty on services. “This will be an additional pressure on our subscribers.”